Marketing Final -Nancy Abram

Production Orientation

"if you build it they will come" -focus on efficient production and the internal capabilities of the firm rather than on the market -furniture industry and Apple

Advertising Content = Benefits Sought

-"sell the sizzle not the steak" -sell product's benefits, not its attributes -a benefit should answer "what is in it for me?"/what the consumer will receive by using the product -ask "so?" to determine if advertising offers attributes or benefits

Factors In Determining Price

-Consumer Demand - Value Perception -Costs -Competition

Integrated Marking Communication is Growing WHY?

-Proliferation of media/new channels for niche goods -Fragmentation of mass market -Mature, saturated markets -sheer excess of goods and services, desire for increased share and loyalty -Need for measurable results (direct marketing, sales promotions, loyalty programs)

Franchisee Benefits

-Prove Concept - help @ low cost -Known Brand -Training, help with site election -Only operate, not create -Shared Risk -More successful than independents

Franchisor Benefits

-Rapid Growth -Shared Risk -OPM -Entrepreneurs work for YOU -Fees and royalties -Income Streams

Cons of CSR

-Takes focus away from making profits -Business executives spend shareholder money on environmental initiatives

Private Label Brands Retailing

-Target Up and Up -Trader Joe's -Victoria Secret -Simple Truth Growing at nearly 8x that of national brands, retailers have the DATA so have the POWER

Strategies for Selecting Target Markets

-Undifferentiated Targeting: mass market targeting, one big market, one marketing mix, Ex. Flour and Sugar -Concentrated Targeting: select 1 segment of a market for targeting (niche) Ex. kids clothing, nice cars -Multisegment Targeting: 2 or more well-defined market segments and develops a marketing mix for each Ex. 18 dif laundry detergents w for tough stains, powerful cleaner (cannibalization)

Technological Environmental Factors

-alternate forms of competition and innovation -components of competition

Product Modification

-change one or more of a product's characteristics -elimination of the original product from the product line -usually an upgrade Ex. Coke blind taste test, Pepsi won so created New Coke & failed Functional Modification: how the product works -iPhones

Media/Channel Strategy

-concept of aperture -dispersion challenging for mass appeal products -helpful to niche products

Economic Environmental Factors

-consumer income, inflation and recession

Fun Meal Toys/Premiums Supply Chain

-deal with movie/brands -approved suppliers -designers -brokers -factories -logistics -financing -PUSH distribution -seasonal/fad -long lead time

Social Environmental Forces

-demographic shifts (age, race, ethnicity, location) -cultural changes, -attitudes, values and lifestyles

Product Placement and Sponsorship

-estimated globally at $48 BILLION -sports sponsorship $53 BILLION (event signage, promotions, naming of portions of game, course, stadium, teams, racing) -naming rights -BETWEEN ADVERTISING AND SPONSORSHIP

Channel Conflict

-horizontal/vertical -made worse with Private Label -Manufacturers drive for favorable arrangements in distribution -retailers need margins and consumer traffic -where does the power lie in the supply chain? -Ex. Dasani and Aquafina -Ex. Goodyear Tire Exists bc the value chain (cotton to shirt) everyone wants to make money bc they are each adding value to it

creative strategy

-identifying product benefits for consumers -Variety of appeals/reasons for someone to buy a product (profit, health, ego, fear, admiration, convenience, fun/pleasure, environmental, consciousness/social responsibility)

Continuum of Consumer Buying Decisions

-involvement, time, cost, information search, number of alternatives -routine, limited and extensive

Regulatory Environmental Factors

-laws protecting competition -laws affecting marketing mix actions -self-regulation

Approaching the Customer and Probing Needs

-long lasting first impression of salesperson -relationship with the prospect must be created -qualified leads: ask a lot of questions PROBE FOR NEEDS - MAKE IT ABOUT THEM!

Advertising

-paid, controlled communication. From a sponsor, manufacturer, retailer or organization -involves message and a variety of media delivery channels

Franchisee Challenges

-poor leadership -disputes -excessive fees -can't customize -only an operator -development compliance

Benefits of Branding

-product identification: most important, distinguish their products from all others -repeat sales -new product sales

Development

-prototype is made -marketing strategy is outlined (positioning) -packaging, branding, labeling -promotion, price, and distribution strategy -manufacturing feasibility

Pros of CSR

-right thing to do -businesses have the resources to devote to fixing social and environmental problems -prevents govt regulations and potential fines -it can be profitable -need healthy society for long term growth

Franchisor Challenges

-some poor operators -disputes -large franchisees -development compliance

Levels of Distribution Intensity

1. Intensive: convenience goods, achieve mass market selling, many intermediaries 2. Selective: shopping and some specialty goods, work with several intermediaries in strategic locations 3. Exclusive: specialty goods and industrial equipment, one single intermediary

Consumer Decision Making Process

1. need recognition 2. information search 3. evaluation of alternatives 4. purchase 5. post purchase behavior

Idea Screening

1st filter of the product development process which eliminates ideas that are inconsistent with the orgs new product strategy or are inappropriate Concept test: test to evaluate a new product idea before any prototypes have been created -line extensions (Burgers) -must screen with target

Extensive Problem Solving

A consumer problem-solving approach where consumers buy in an unfamiliar product category, it usually involves the need to obtain substantial information and a longer time to choose -expensive or unsought/infrequently bought item -high involvement/cost -internal and external info search -most cognitive dissonance -specialty items Ex. vacation/puppy/car

New Product Development Process

A seven-phase process for introducing products: new product strategy, idea generation, idea screening, business analysis, product development, test-marketing, and commercialization

Connection

ALL PLC Stages Helps introduce products, stimulate purchase and keep the brand in customer's minds

How to Generate Leads

Advertising publicity direct mail/telemarketing cold calling internet web site referrals networking trade shows/conventions company records

Social Media

Attention and Interest

AIDA

Attention, Interest, Desire, Action

Private Label/Store Brand

Brand name owned by a retailer -Merchandise developed for a given store and displaying that store's label are growing rapidly -Ex. Walmart's Great Value

Branding

Brand: name, term, symbol, design or combination that identified a seller's products and differentiates them from competitors Brand Name: part of brand that can be spoken, including letters (YMCA), words (Chevrolet) and numbers (7-Eleven) Brand Mark: cannot be spoken, (Nike swoosh)

How to Qualify Leads

Budget (do they have the ability to spend?) Authority (do we know who the decision maker is?) Need (does the prospect have an urgent business problem and pain to address?) Timing (do we know a time frame in which they will need a solution?)

Penetration

By charging a low price for a product, a larger share of the market is captured, resulting in lower production costs.

Co-Branding

Combining two or more brands to increase customer loyalty and sales for each individual brand. Ex. Dr. Pepper and Lip Smacker

Nature of Information Search

Consumers continually recognize problems and opportunities, search is ongoing -Internal: search of long term memory to determine if a solution is known, what are the types of potential solutions, and ways to compare the possible solutions -External: after internal, marketing controlled info and non-marketing controlled info Ex. Reece's Peanut Butter Cups (internal)

Price to a Consumer

Cost

Demand in Business Markets

Derived - Demand for business products results from demand for consumer products. Inelastic - A change in price will not significantly affect the demand for product. Joint - Multiple items are used together in final product. Demand for one item affects all. Fluctuating - Demand for business products is more volatile/unstable than for consumer products. Multiplier Effect: a small increase or decrease in consumer demand can product a much larger change in demand for the facilities and manufacturing equipment needed to make the consumer product

Who is Responsible? (environment/labor laws/safe products)

EVERYONE (govt, corps, consumers)

Food Supply Chain

Ex. Tyson/Perdue -develop product -specification -manufacturing plants approved -more than 1 -use pull ordering -logistics -staple product -domestic

Examples of Retailers Using Franchise Business Model

Food: 7-Eleven, Dominos, Dunkin, McDonalds, OG, Panera, Subway, Taco Bell Services: Curves, Days Inn, ReMax Merchandise: Ace Hardware

Consumer Research

GATHER/ANALYZE DATA IN ORDER TO REDUCE RISK! Observational Research: people watching people, people watching an activity, machines watching people and machines watching machines Survey Research: interact with people or post questionnaires online to obtain fact, opinions and attitudes Experiments: gathering primary data where the researcher alters one or more variables while observing the effects Sampling Procedures: -ask people in the market or non-users why they do not use it -random samples > convenient samples -stratified sample: population divided into groups such as gender and age then randomly selected -cluster sample: population divided into groups such as gender and age then a random sample of clusters is selected

Steps in the Selling Process

Generate Leads Qualify Leads Probe Customer Needs Develop Solutions Handle Objections Close the Sale Follow Up

Persuading

Growth stimulate a purchase or action

Type of Ownership-Retailing

Independent Retailer: owned by a single person or partnership and not part of a larger retail institution Ex. Silkers Chain Store: owned and operated as a group by a single org Ex. Hyvee Franchises: the right to operate a business or to sell a product Ex. 7-Eleven

How Services Differ From Goods

Intangible: no physical object, hard to communicate benefits. Facilities critical part and tangible cues used to communicate services quality and nature Inseparable: production and consumption are simultaneous, consumer takes part in the production Ex. haircuts/surgery Inconsistency/Heterogeneity: services depend on their employees for quality. Use standardization and training to increase consistency bc services are less standardized and uniform than goods Ex. physician and barbers differ in interpersonal and technical skills Perishable: services cannot be saved, stored or inventoried. Challenging to synchronize supply and demand Ex. empty airplane seats and hotel rooms = lost revenue

Informing

Introduction Early Growth Stimulate a need into a want

Business Products

KEY IS INTENDED USE -are used to manufacture other products -become part of another product -aid the normal operations of an org -are acquired for resale without change in form

Benefits of Supply Chain Management

Lower inventory, transportation, warehousing, and packaging costs Greater supply chain flexibility Improved customer service Higher revenues Increased performance and profitability ? on Logistics

Reminding

Maturity Keep the product/brand name in the publics mind

Earned Media

Media Coverage SEO Publicity activities Social Media posts WOM

Advertising and Public Relations

Most Effective: Attention and Interest Not effective: action

sales promotion

Most Effective: Desire and Action

Personal Selling

Most Effective: interest, desire and action

Types of Sales Promotions

Point of sale Sampling Sweepstakes Giveaways Rebates.coupons -kohls cash Price Promotion (Sale) Premiums

Marketing Management Philosophies

Production, Sales, Market, Societal

Price is a Key Component of

Profit Revenue = Price x Quantity

Dimensions of Service Quality

Reliability: ability to perform the service right Ex. flight on time Tangibles: appearance of physical facilities, equipment Ex. gate, planes and baggage claim clean Responsiveness: prompt service and willingness to help customers Ex. answer questions promptly, serving lunch fast to someone in a hurry Assurance: knowledge and courtesy of employees and their ability to convey trust and confidence Ex. flight attendants and pilots knowledgeable about their job Empathy: caring, individualized attention to customers, employees knowing more about customers wants and needs

Channel Intermediaries

Retailer: sells mainly to customers, TAKES TITLE TO GOODS Merchant Wholesaler: an institution that buys goods from manufacturers, TAKES TITLE TO GOODS, stores them, and resells to businesses, govt agencies or retailers and later ships them Agents and Brokers: facilitate the sale of a product by representing channel members. DO NOT TAKE THE TITLE TO GOODS, used in complex negotiations -reduce the number of transactions

Price to a Seller

Revenue

Sales Promotion

SHORT-TERM incentives to encourage the purchase or sale of a product or service to BUY NOW

Basis for Segmentation

Who we are: -Geography -Demographics -Psychographics What/How we buy: *THE MOST IMPORTANT -Benefits sought -Usage rate

Corporate Social Responsibility

a business's concern for society's welfare -long range best interests of company and the company's relationship to society

Sponsorship Marketing

a company spends money to support an issue, cause or event that is consistent with corporate objectives -improving brand awareness -enhancing corporate image SPORTS

push strategy

a marketing strategy that uses aggressive personal selling and trade advertising to convince a wholesaler or a retailer to carry and sell particular merchandise MANUFACTURER PROMOTES TO WHOLESALER TO RETAILER TO CONSUMER, CONSUMER BUYS FROM RETAILER

The Pyramid of Corporate Social Responsibility

a model that suggests corporate social responsibility is composed of economic, legal, ethical, and philanthropic responsibilities and that the firm's economic performance supports the entire structure -ECONOMIC (profits) -Legal (obey the law) -Ethical (do what is right, just, fair) -Philanthropic (good corporate citizen)

promotional allowance (trade allowance)

a payment to a dealer for promoting the manufacturer's products

Market Orientation

a philosophy that assumes that a sale does not depend on an aggressive sales force but rather on a customer's decision to purchase a product; it is synonymous with the marketing concept

New-Product Strategy

a plan that links the new-product development process with the objectives of the marketing department, the business unit, and the corporation

pull strategy

a promotion strategy that calls for spending a lot on consumer advertising and promotion to induce final consumers to buy the product, creating a demand vacuum that "pulls" the product through the channel MANUFACTURER PROMOTES TO CONSUMER, DEMAND FROM RETAILER, DEMAND FROM WHOLESALER DEMAND FROM MANUFACTURER

product placement

a public relations strategy that involves getting a product, service, or company name to appear in a movie, television show, radio program, magazine, newspaper, video game, video or audio clip, book, or commercial for another product; on the Internet; or at special events

Consultative Selling

a sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnerships -build trust and long term relationships

Diversification

a strategy of increasing sales by introducing new products into new markets -Ex. Google Station in India -Ex. Starbucks buys Ethos Water

Promotional Mix

advertising, public relations, sales promotion, personal selling, social media

Retailing

all the activities directly related to the sale of goods and services to the ultimate consumer for personal, non business use -break bulk -provide assortment -hold inventory -perform/add service

Market Development

attracting new customers to existing products -Ex. McDonald's opening restaurants in China

Paid Media

banner ads, sponsored posts

Cause Related Marketing

commercial activity in which businesses and charities form a partnership to market an image, a product, or a service for their mutual benefit; a type of promotional campaign Ex. give 10% of sales to Dance Marathon today

Elastic

consumer demand is sensitive to price changes

Routine Problem Solving

consumers recognize a problem, make a decision, and spend little effort seeking external information and evaluating alternatives -low cost goods/low involvement -familiar with brands in product category and stick to one -do not experience need recognition until exposed to ads or see on shelf -buy first, evaluate later -buy Crest Whitening Strips every time, do not look for alternatives

Product Development

creation of new products for present markets -Ex. Starbucks has powdered instant coffee

Product Life Cycle

describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline Introductory: GAIN AWARENESS inform/educate, 1 product, price skimming/penetration, limited distribution, high failure rate, little competition, frequent product modification and limited distribution, high marketing/advertising/production costs, developing product awareness and informing consumers on product's benefits Growth: STRESS DIFFERENTIATION, more versions of product, gain market share, more outlets sales/profits grow at an increasing rate, many competitors enter the market, large companies may start to acquire small firms, DISTRIBUTION IS KEY Maturity Stage: MAINTAIN BRAND LOYALTY, full product line, defend market share, maximum outlets, sales increase at a decreasing rate, market saturation, Ex. household appliances, product design changes more stylistic and less functional, competitors drop out of market, promotions Decline: HARVESTING DELETION, reduced competition, stay profitable, fewer outlets, long run drop in sales, Ex. Fad items and Landline phones, eliminate marketing expenses

Line Extension

development of a product that is closely related to existing products in the line but is designed specifically to meet different customer needs Ex. Chobani introduced dessert product called Flip

insitutional advertising

enhances company's image rather than touting a specific product -General Electric -BP (change our logo we change the world)

Marketing

entails processes that focus on DELIVERING VALUE and BENEFITS to customers NOT just SELLING goods and services -process of developing need satisfying products/services -delivering value through PRICING strategy, convenient access via DISTRIBUTION and integrated COMMUNICATION to TARGETED buyers

Evaluation of Alternatives

evoked set (consideration set)

Consultative Salesperson

expect expertise about product/service, customers, competition, industry

Opinion Leaders

first to try new products and who influences the opinions of others -public figures such as celebrities to promote products Ex. Opera and Weight Watcher ads

Market Penetration

increase market share among existing customers -Ex. McDonald's introducing all day Breakfast so breakfast eaters come more

Inelactic

increase of decrease in price will not affect the demand

Postpurchase Behavior: Cognitive Dissonance

inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions -justify decision by seeking new info that reinforces positive ideas about the purchase -REINFORCEMENT TO SEE IF WE MADE A GOOD DECISION

Closing the Sales

look for customer signal keep an open mind negotiate tailor to each market

Ansoff's Strategic Opportunity Matrix

market penetration, market development, product development, diversification

Family Branding

marketing several different products under the same brand name Ex. Jack Daniel's sells whisky, barbecue sauce, brisket, mustard and clothing lines

Idea Generation

new product ideas come from many sources such as customers, employees, distributors, competitors, consultants

Value = Benefits/Costs

price is a part of cost

Trade Sales Promotion

promotion activities directed to members of the marketing channel, such as wholesalers and retailers PUSH

Consumer Sales Promotion

promotion activities targeted to the ultimate consumer market PULL

Personal Selling

purchase situation involving a personal, paid-for communication between two people in an attempt to influence each other

RFM analysis

recency, frequency, monetary

Need Recognition

result of an imbalance between actual and desired states -exposed to an internal or external stimulus Ex. a want, see a new pair of shoes and want to buy them

Societal Orientation

satisfying customer needs and wants while enhancing individual and societal well-being -being more environmentally friendly

Information Search

search for information about the various options that exist to satisfy that need -Ex. visit Rotten Tomatoes to see what movie is getting good reviews -Internal: recalling past info (past Hotel bc clean, go again) -External: info outside of environment (Non-marketing controlled: not associated with marketers promoting a product) -Ex. personal experiences -trying a new product, personal sources -family, friends recommend, public sources -rating orgs such as Rotten Tomatoes) -Marketing Controlled Info Source: radio, newspaper, magazines, tv, salespeople

Elasticity

sensitivity to change in price

Environmental Forces

social, economic, technological, competitive, regulatory

Loyalty Programs

strengthen the relationship with consumers, use more frequently -reward loyal customers for making multiple purchases. The objective is to build long-term, mutually beneficial relationships between a company and its key customers.

Business Analysis

the 2nd stage of the screening process where preliminary figures for demand, cost, sales/cannibalization, and profitability are calculated

Sales Orientation

the belief that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits -selling things and collecting money

Commericalization

the decision to market a product

Marketing Concept

the idea that the social and economic justification for an organization's existence is the satisfaction of customer wants and needs while meeting organizational objectives

Test Marketing

the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation -standard: new product normal distribution channels -controlled: new product through a set of retailers who have paid to set aside shelf space in a desirable spot -simulated: experiment in which a sample of consumers select products

Public Relations

the marketing function that evaluates public attitudes, identifies areas within the organization the public may be interested in, and executes a program of action to earn public understanding and acceptance -PERFORMANCE RECOGNIZED (not synonymous with bullshit or spindoctoring) -Create programs and communication for multiple stakeholders about areas of interest of the org/product -internal and external -owned and earned media -to get a positive public image

Limited Decision Making

the type of decision making that requires a moderate amount of time for gathering information and deliberating about an unfamiliar brand in a familiar product category -low to moderate involvement -mostly internal search -few alternatives -Ex. out of Crest Whitening Stripes so look at the other brands -shopping goods

Product advertising

touts benefits of existing product -General Electric's washing machine

Owned Media

websites, blogs, social media presence

Skimming

whereby a firm charges a high introductory price, often coupled with heavy promotion. The term is derived from the phrase "skimming the cream off the top." -Companies often use price skimming for new products when the product is perceived as having unique advantages. Over time the price will be lowered.